Brexit Enters Its Most Dangerous Phase

(Bloomberg Opinion) -- If the European Commission’s chief negotiator, Michel Barnier, utters the words “decisive progress” sometime in the next few days, take notice. It would be the signal that the U.K. and the European Union have agreed the terms of their divorce. A summit can be held and the white smoke sent up.

That would be a watershed after 16 months of negotiations and drama. It would mean broad agreement has been reached, including one on the tricky problem of the border between Ireland and Northern Ireland.

But a handshake between the chief negotiators of the two parties at the table is, whisper it, the easy part. The bigger hurdle is whether the British Parliament, which still has to vote on the deal, will approve it. That looks far from assured.

Prime Minister Theresa May argues that there is no majority in Parliament for leaving the EU without a deal. Her agreement, she will say, is the only route to an orderly exit.

Members of Parliament are pushing back in force — including Arlene Foster, the head of the Democratic Unionist Party, the 10-strong Northern Irish Party that May relies on for her majority in the House of Commons. Foster opposes any deal that treats Northern Ireland differently than the rest of the U.K.

She has called May’s assurance, in a letter leaked to the Times newspaper, that she would never sign an agreement that would let a divide come into force as alarming. May’s language would still, in her view, allow a border to be created in the Irish sea. Sammy Wilson, a DUP member, warned on Friday that the DUP would reject any deal based on the contents of May’s letter. “The PM knows the consequences, she now needs to reconsider,” he said on Twitter.

Former Brexit secretary David Davis — who quit the government over May’s plan to keep the U.K. and EU closely aligned for trade in goods — said on Thursday that defeat in the Commons is “looking like a probability.” There is mounting pressure for the government to publish legal advice it receives on the agreement; that might give MPs more cover to reject it.

Add to that party-political calculus. The opposition Labour Party says it wants to avoid a no-deal exit. However, one of the six tests the party has set to determine whether it will support any agreement stipulates that a deal must deliver the “exact same benefits” as the U.K. currently enjoys as a member of the single market and customs union. It has been clear for a very long time that this isn’t going to happen.

May has been courting Labour MPs and talking in cross-party terms about the national interest. But it’s not clear she will get enough defectors to save her deal. Momentum, the powerful grassroots campaign group within Labour, wants MPs to vote down May’s deal. Shadow Brexit secretary Keir Starmer himself warned this week that a “blind Brexit” — one in which the future terms are unclear — would be bad for business.

The timetable is extremely tight and the parliamentary arithmetic is, as Bloomberg’s Robert Hutton details here, far from clear. If the House of Commons rejects the agreement, the government could ask lawmakers to vote again. May could try to win support by offering MPs the chance to scrutinize and vote on the future trade deal with the EU (at present the European Parliament gets to vote separately on that, but the Commons would not). MPs could also seek to amend the motion approving the Withdrawal Agreement, complicating the approval process.

May has said the alternative to parliamentary approval isn’t further negotiations, but having no deal at all. This isn’t an idle threat. There is no reason the EU will suddenly be willing to alter its position. Barnier knows that the U.K. government, for all the technical notices it has been releasing on that eventuality, is unprepared for a no-deal outcome. That was alarmingly (and inadvertently) underlined by Brexit Secretary Dominic Raab this week: He told a technology conference that he had only recently discovered the full extent of Britain’s reliance on the Dover-Calais crossing — almost 20 percent of the U.K.’s trade in goods uses the route.

If the Commons rejects the divorce deal, the government is required to make a statement within 21 days about how it will proceed. It’s possible that a strong market reaction might make Parliament reconsider, so a second vote is possible, if not straightforward because the wording of the motion would need to be substantially changed.

And it is unclear what happens if the government decides to proceed with a no-deal Brexit if the Commons rejects May’s deal, especially since there is clearly no majority in Parliament for leaving without an agreement. In that case, the government would be highly likely to face a no confidence vote.

Even Commons approval for May’s deal wouldn’t guarantee its smooth adoption. For the Withdrawal Agreement to enter into force, Parliament also has to pass the EU (Withdrawal Agreement) Bill sometime before exit day. One doesn’t follow naturally from the other: There was a large parliamentary majority in favor of joining the European Economic Community in 1973, but the implementing bill passed with only eight votes.

By the time MPs get to vote on that latter piece of Brexit legislation, more time will have passed for the actual agreement to be fully scrutinized and that could mean more opposition. A new leadership crisis may arise. Or MPs may try to use the bill to win new concessions from the government.

Finally, if the agreement is passed and ratified, there will be major areas of uncertainty to resolve over the period of transition that will begin on March 29, 2019 — not least on the future of Britain’s customs arrangement with Europe and many aspects of its future trading relations. To get this far has meant deliberately fudging these issues.

The coming days and weeks may pass, as with previous Brexit inflection points, without a breakthrough. But if Barnier says the words “decisive progress,” it’s just worth recalling his favorite mantra: Nothing is agreed until everything is agreed.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.

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